Archive for July, 2008

  • So Long SPX 1250
    , July 7th, 2008 at 1:06 pm

    image001.bmp

  • Short Interest Is Up 55%
    , July 7th, 2008 at 12:16 pm

    Could this be some sort of bubble?

    Record bets against U.S. stocks may mean the market is on the verge of a rebound fueled by purchases of shares that were sold short, according to JPMorgan Chase & Co.
    So-called short interest on the New York Stock Exchange has risen 55 percent this year to a record 3.6 percent of listed shares, JPMorgan Chief Equity Strategist Thomas J. Lee wrote in a report today. In a short sale, an investor sells borrowed shares in anticipation of being able to buy them back later, or “cover,” at a lower price.
    Given the “extreme levels” of short interest, positive catalysts for the market “could trigger a substantial short- covering rally,” New York-based Lee wrote.

    The article notes that 36% of companies in the S&P 500 have at least 5% of their shares sold short.

  • Ryanair’s CEO Promises In-Flight Blow Jobs
    , July 3rd, 2008 at 1:50 pm

  • Looking at the Bear
    , July 3rd, 2008 at 7:56 am

    The S&P 500 closed today at 1,261.52 which is the lowest close since July 24, 2006. The index is now off 19.4% from its all-time high of October 9, 2007.
    Since October 9, there have been 184 trading days. This is how the days of the week have panned out:
    Monday………….-3.69% (35 data points)
    Tuesday………….5.26% (36)
    Wednesday…….-6.17% (39)
    Thursday………..-1.93% (37)
    Friday…………….-13.59% (37)
    So the bear market is heavily, but not exclusively, a Friday phenomenon. The other four days of the week have lost a combined -6.72%.
    The most surprising fact is that of the 184 days, 92 have been up, 91 were down and one was unchanged (January 3).

  • Best Little Whorehouse in Wellesley
    , July 2nd, 2008 at 3:47 pm

    Professor Greg Mankiw notes that in his hometown of Wellesley police recently shut down a (ahem) massage business. This is the second time in the last six months that the police of busted such an enterprise.
    But here’s the interesting fact. One of the people just arrested, William Eastwick, is the same guy who tipped off the police on the first arrest.

    Eastwick tipped Wellesley Police off to that operation, said [Wellesley Police Sgt. Marie] Cleary, although it is unclear why he did that.

    Clearly, Cleary is unclear, but to Dr. Mankiw, it’s perfectly clear.

    Like any businessman, Mr Eastwick prefers to have fewer competitors. Some businessmen lobby Congress for trade restrictions. Others alert the police to the brothel down the block. And when using the power of the state to thwart competition, they can both pretend to be acting in the public interest.

    Sometime you need a small example to see the big picture. I wouldn’t say the state and Mr. Eastwick are in bed together, they just provide similar services.

  • CircuitBuster Now Officially Busted
    , July 2nd, 2008 at 12:14 pm

    A three-act play:
    April 14
    Blockbuster offers $1 billion for Circuit City
    May 10
    Circuit City Opens Its Books to Blockbuster
    July 2
    Blockbuster Withdraws Offer for Circuit City
    This was one the worst ideas to hit the Street in a long time. The good thing is that shareholders had far better judgment than management. Score one for the wisdom of crowds.

  • Samuel Israel Surrenders
    , July 2nd, 2008 at 11:53 am

    21_samissle_lgl.jpg
    Sam finally gives up:

    Samuel Israel, the fugitive hedge-fund firm founder convicted of directing a $400 million fraud at Bayou Group LLC, surrendered in Massachusetts, almost a month after fleeing instead of starting his 20-year prison sentence.
    Israel, 48, turned himself in at 9:15 a.m. today, according to Sue Anderson, assistant to Southwick, Massachusetts, Police Chief Mark Krynicki. Southwick, near the Connecticut border, is about 117 miles from where Israel disappeared in New York the day he was to report to a federal prison northwest of Boston.
    “He is in federal custody,” Rebekah Carmichael, a spokeswoman for U.S. Attorney Michael Garcia in Manhattan, said in an e-mailed statement.
    Israel pleaded guilty in 2005 to securities fraud. His car was found June 9 on a bridge north of New York City with the message “suicide is painless” written in the dust on its windshield. Within a week, state and federal authorities in New York, where he pleaded guilty, ruled out suicide and launched an international manhunt.

  • UnitedHealth Lowers Guidance
    , July 2nd, 2008 at 9:49 am

    As I expected, UnitedHealth (UNH) lowered its profit guidance for this year. The company now sees EPS coming in between $2.95 to $3.05.

    Chief Executive Stephen J. Hemsley noted the quarter’s results were hurt by lower margins, adding that second-quarter weakness also stems from reduced margins at its risk-based businesses and Medicare operations. “We are continuing to take the aggressive specific steps necessary to improve our operating performance, as well as to better position our organization for sustained future growth,” he said. To stop weakness in the risk-based operations, the company has been letting go of some customers who didn’t generate enough profits.

    The company is also paying about $900 million to settle two class-action lawsuits regarding the back-dating of stock options. Assuming the current forecast is correct, then UNH is a very cheap stock. The shares are up nicely today.

  • This Just In…
    , July 1st, 2008 at 3:18 pm

    Multivariate Markov Switching With Weighted Regime Determination: Giving France More Weight than Finland
    Um…no duh!

  • Worst First Halves Since 1971
    , July 1st, 2008 at 3:05 pm

    Here are the ten worst first halves since 1971, going by the S&P 500’s total return:
    Year…………………Gain
    2002………………-13.16%
    2008………………-11.91%
    1973………………-10.38%
    1974………………-10.17%
    1982………………-7.83%
    2001………………-6.70%
    1984………………-4.90%
    1977………………-4.38%
    1994………………-3.39%
    1981………………-0.95%